US Economics Policy - The manager of a paper mill is preparing for her most important test yet. On Tuesday morning, she must testify before a senate committee to "justify" the firm's high price. One Senator is particularly angry with the firm because its price is twice the firm's marginal cost. On Tuesday afternoon, the manager is scheduled to appear before the House Subcommittee on the Environmen...

Production Functions, Isoquant and Isocost Analysis, - Ongoing U.S. struggles in Iraq, political unrest in South America, and civil wars in Africa are again driving crude oil prices up. If the spreading unrest continues, it is widely believed that oil prices will continue to escalate. Adding to the uncertainty, it is predicted that natural gas prices in the United States will again rise dramatica...

Capital to Labor Question - In a effort to stop the migration of many of the automoble manufacturing facilities from a city's area. The city council is condsidering passing a statute that would give investment tax credit to go auto manufacturing. This would reduce auto manufacturing costs of using capital and high tech equipment in their production processes. On the evening of the vote, local...

Four Firm Concentration Rate & Economic Indices - If a company operates in a highly competitive industry and competes against many other firms. In the past few years, many new firms have entered the industry and the company now earns a return on investment very close to the prevailing interest rate. The four-firm concentration rate and the Herfindahl-Hirschman index are both low, but the Rothsch...

Elasticity - I have the following data about the demand for Motorola picture phones: (own) price elasticity = -.12 cross-price elasticity with digital cameras = +3 income elasticity = +.15. If the goal of Motorola was to increase total sales revenue (ignoring cost considerations), would it raise or lower its selling price? Why? What would happen to the demand for Motorola picture p...